Navigating Houthi Attacks: Airfreight Surges Amidst Logistics Disruption

Major carriers, including industry giants like Maersk and CMA CGM, have rerouted their vessels via the longer Cape of Good Hope route due to heightened risks in the Red Sea. This shift poses potential consequences for supply chains, adding 2 to 3 weeks to cargo journeys and causing disruptions in the maritime sector. Anticipating reduced carrier capacity, ocean freight rates are expected to rise, with potential congestion at ports and delays in shipments.

In response to disruptions in sea freight, the airfreight industry has experienced a substantial surge in demand. According to supply chain intelligence firm Xeneta, airfreight volumes, particularly for cargo bound for Europe, have sharply increased. The fear of Houthi attacks in the Red Sea has prompted companies to explore airfreight options, despite the higher costs involved.

Flights are operating at an average of 93% full from a cargo perspective, and if the current trend persists, airfreight rates are expected to rise significantly. While industries with exposure to European markets, including automotive manufacturers, are already feeling the impact, the challenges also open up opportunities for adaptation.

The adaptability of industries in the face of these challenges is crucial. “In times of logistical challenges, our commitment to delivering exceptional services remains unwavering. At Broekman Logistics, we navigate disruptions with precision, ensuring our clients’ supply chains remain resilient and adaptable,” says Martijn Tasma, Director Global Forwarding at Broekman Logistics. As companies explore alternative transportation modes such as rail and airfreight, this shift may exert additional pressure on airfreight capacity in early 2024. The suspension of Red Sea routes by shipping firms like Maersk, Hapag-Lloyd, and COSCO underscores the seriousness of the situation, with potential longer transit times and disruptions in the supply chain for months.

The repercussions of Houthi attacks are particularly pronounced on the Europe-India trade lane. The rerouting of shipping routes and the increased demand for airfreight between Europe and India present challenges such as extended lead times and heightened transportation costs. “As an India Specialist, boasting 18 offices strategically positioned across the country, we comprehend the intricacies of transportation to various regions. Amid the ongoing disruptions, our expertise comes to the forefront as we provide guidance on the safest and most efficient options for transporting goods to and from India,” elaborates Karan Vij, Trade Lane Manager at Broekman Logistics. Our expansive presence facilitates seamless coordination, allowing us to offer tailored solutions to our clients. This includes innovative approaches such as combining different modes of transportation – be it Ocean + Air, Air + Trucking, or Rail. Additionally, we leverage various transit hubs like Jebel Ali and Istanbul to ensure the security and efficiency of your supply chain.

As the Red Sea crisis continues, the surge in airfreight demand highlights the resilience of industries in the face of geopolitical disruptions. However, the long-term impact on logistical strategies remains uncertain, and industries must remain vigilant. “Feel free to let us know if you have any further adjustments or specific additions in mind. In times of uncertainty, your concerns are our priority,” concludes Martijn Tasma, Director Global Forwarding at Broekman Logistics.